Business Support, and Help for those Required to Close
With the recent government announcement on the new COVID alert three-tier system in England, Chancellor of the Exchequer, Rishi Sunak has also promised more support for businesses, and for those that will be required to close in order to help slow the spread of COVID-19. Below we have outlined this help and what is available to you...
Job Support Scheme
The Job Support Scheme is designed to protect viable jobs in businesses who face a lower demand over winter due to COVID-19. With this scheme, the employer will continue to pay their staff for the time worked, but the burden of hours not worked will be split between the employer and the government. The government will pay a third of the hours not worked up to a cap, with the employer also paying a third. This will give the employee a minimum of 77% of their normal wage.
Employers using the Job Support Scheme will also be able to claim the job retention bonus if they meet the eligibility criteria.
The scheme begins on 1st November and will run for six months until April 2021.
Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
To be eligible:
- All employers must have a UK bank account and PAYE.
- Employees must be on an employer's PAYE payroll on or before 23rd September 2020.
- For the first three months of the scheme, the employee must work at least 33% of their usual hours.
- Employees can cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working period must cover a minimum period of seven days.
What does the scheme cover?
- For every hour not worked by the employee, both the government and employer will pay a third each of the usual hourly wage for that employee. The government contribution will be capped at £697.92 a month.
- Payments will be made in arrears, reimbursing the employer for the government's contribution.
- The grant does not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
- Employees who have previously been furloughed will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
- Employers must pay employees their contracted wages for hours worked, and the government and employer contributions for hours not worked.
What's reduced hours?
- The employee must be working at least 33% of their usual hours.
- For the time worked, employees must be paid their normal contracted wage.
- For time not worked, the employee will be paid up to two-thirds of their usual wage.
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
How do I claim?
- The scheme will be open from 1st November, and employers can claim online via gov.uk from December 2020. They will be paid on a monthly basis.
- Grants will be payable in arrears and can only be submitted after the employee has been paid and the payment has been reported to HMRC via an RTI return.
Job Support Scheme Expansion for Closed Businesses
The Job Support Scheme will also be expanded to support businesses across the UK required to close their premises due to coronavirus restrictions. Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work - protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.
The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1st November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December.
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates effectively across all four nations.
Local Restrictions Support Grant Scheme
In addition to the expansion of the JSS, the government is making the Local Restrictions Support Grant scheme more generous so that businesses in England can receive up to £3,000 per month, and are eligible for payment sooner, after only two weeks of closure rather than three.
The devolved administrations in Scotland, Wales and Northern Ireland will benefit from a £1.3 billion increase to their guaranteed funding for 2020-21 - allowing them to continue their response to COVID-19 including through similar measures if they wish.
This scheme will cover businesses that, as a result of restrictions set by one or more of the four governments in the UK, are legally required to close their premises. This includes businesses that are required to provide only delivery and collection services from their premises. To be eligible employees must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September.
Under the scheme, employees will need to be furloughed for a minimum of seven consecutive days at any given time and the payments to employers will be made monthly in arrears.
- Properties with a rateable value of £15,000 or under will receive grants of £667 per two weeks of closure (£1,334 per month).
- Properties with a rateable value of over £15,000 and less than £51,000 will receive grants of £1,000 per two weeks of closure (£2,000 per month).
- Properties with an rateable value of £51,000 or over will receive grants of £1500 per two weeks of closure (£3,000 per month).
The government is also extending the scheme to include businesses which have been forced to close on a national rather than a local basis.